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Autoliv's third quarter profit just lags forecast |
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STOCKHOLM (Reuters) -- Autoliv, the world's biggest vehicle air bag and seat belt maker, posted a fall in quarterly pretax earnings stung by higher raw material and interest costs, but saw its operating margin rising in the final months of 2007.Autoliv said third-quarter pretax earnings fell to $95 million from a year-ago $102 million. That just missed a mean forecast of $97 million in a Reuters poll of nine analysts.Shares in the firm were up 1.1 percent at 409 crowns by 1046 GMT, virtually unchanged from before the results were released and in line with the broader market in Stockholm."The report was very much in line with expectations. There are no peculiarities in it whatsoever, as far as I can see," said an analyst who asked not to be identified.The firm has faced headwinds from a lackluster automotive market in recent quarters, mainly stemming from production cuts at Detroit's 'Big Three' automakers Ford Motor Co, General Motors and DaimlerChrysler, as well as rising costs for raw materials.But in the third quarter global light vehicle production was estimated to have grown 8 percent year-on-year, Autoliv said, helping it record organic sales growth of 6 percent compared with the 4 percent it had forecast three months ago.Autoliv posted sales of $1.56 billion, up from $1.41 billion a year ago, just beating the $1.53 billion mean forecast given by analysts. Strong sales in Europe, where it generates more than half its revenue, offset weaker growth in North America.The company said higher raw material costs hurt earnings to the tune of about $5 million in the third quarter."Prices for raw materials remain at near record levels. Consequently, many Autoliv component suppliers continue to be squeezed between high raw material prices and the constant pricing pressure in the automotive industry," the firm said in a statement.Outpacing marketThe firm, which is based in Sweden but reports in dollars, said it saw light vehicle production in Europe, North America and Japan rising 6 percent in the fourth quarter.It said it expected to outpace the broader market in the fourth quarter, forecasting sales growth of about 8 percent year-on-year while its operating margin was seen exceeding 9 percent compared with 8.5 percent in the same period last year."During the fourth quarter, the operating margin will benefit from our restructuring activities and other aggressive cost reduction programs, while the effect of higher raw material prices is expected to level off," the firm said.Amid fierce price pressure from struggling auto giants, Autoliv has been moving production to countries with low labor costs, mainly in eastern Europe and Asia.Autoliv said it was revising its full-year forecast of organic sales growth to close to 4 percent from a previous outlook of at least 3 percent and affirmed its guidance of a full-year operating margin of close to 7.5 percent.
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